Communications and Information Technology Minister Steven Joyce has made his first major decision, moving to scrap the Labour-led government’s $340 million Broadband Investment Fund (BIF).

BIF gets the hiff
Labour set up the five-year BIF programme as a scheme to experiment with different wired and wireless broadband technologies, with a focus on the regions.

Mr Joyce, who suspended the BIF at the time of the election, says the fund will now not proceed.

A number of local government authorities and alternative broadband technology companies such as Kordia had proposals in front of the BIF, which had 19 full applications awaiting approval, and 156 expressions of interest.

Instead, his government will now focus on its six-year, $1.5 billion plan to bring “ultrafast broadband” to 75% of New Zealanders.

"A lot of organisations spent a lot of money on BIF applications," says Tuanz chief executive Ernie Newman.

However, the government could not be persuaded to keep the fund.

“The BIF was not compatible with the Government’s roll out of ultra fast broadband to the premises - it had its own specific set of criteria and was not focussed on our key objective of achieving widespread ultra fast broadband,” says Mr Joyce.

Mr Newman says he’s sad to see BIF getting the biffed, “there’s been an air of inevitability about the decision” since the election.

However, Mr Newman hopes part of BIF’s spirit will live on. “There’s a great deal of intellectual capital in those [BIF] applications. I hope the momentum and alliances and IP that arose out of the process is not lost."

Mr Newman points to the way BIF brought new broadband players such as power line companies into the market, plus new investors such as regional development authorities and pension funds.

“The type of traditional telco we’ve seen in the market in the past 20 years not necessarily the best for the next generation of investment,” says Mr Newman.

The Tuanz executive's sentiment is echoed by InternetNZ, which has been promoting an independent report that asserts power line companies could complete a national broadband network for $2 billion less than the $5 billion it would cost if constructed by Telecom – the most obvious private partner to top up the $1.5 billion in tax payer funds earmarked for the fibre-to-the-home project.

DDC decapitated
Stating that he’s “clearing the decks”, Mr Joyce has also moved to withdraw funding for Digital Development Council and Forum (DDC) will be withdrawn immediately.

Labour set up the DCC with $825,000 in funding

Mr Joyce says the umbrella group has been axed “because it is our intention to work instead directly through the relevant industry groups.”

Mr Newman – whose Tuanz formed part of the DCC – says the body’s “decapitation” was again expected, but frustrating.

“On the one hand been a good conduit to get dialogue going between like-minded organisations. But on the other it got no runs on the board,” says Mr Newman.

Mr Joyce says he will be announcing the next steps towards the roll out of ultra fast broadband in the near future, following discussions with the industry and cabinet.

The minister will be hoping for a smoother tender process for New Zealand’s mooted national broadband network than the dog’s breakfast request-for-tender process that is still ongoing across the Tasman for the Rudd government’s $A4.6 billion national broadband network.